This story was updated on Friday, Nov. 8, 2024, at 8:24 a.m.
A federal interest rate cut and the recent presidential election could directly impact Atlanta’s real estate market.
The Federal Reserve cut interest rates by a quarter point Thursday, just days after this week’s U.S. presidential election, as housing affordability and inflation remain top concerns for home buyers.
Derrick Barker is the CEO of Nectar, an Atlanta financing company for professional real estate investors. He said President-elect Donald Trump’s policies on immigration and tariffs on imports could increase the cost of building houses, therefore worsening inflation.
“If you look and see who’s doing the construction work, many of them are immigrants. Then you need capital and materials. And a lot of the materials are imported,” Barker said.
According to a 2022 survey, immigrants account for 25% of Georgia’s construction labor force.
Barker said neither of the major party candidates proposed plans to address housing affordability.
“Trump or Harris weren’t going to make a huge impact on housing. The biggest impact they’ll make on housing is by operating in such a way where interest rates don’t go up. But that’s not how they’re looking to operate. They’re not looking to operate in such a way where interest rates won’t go up,” Barker said.
He said people can tackle the housing affordability issue at the local level, too. Barker suggested changing local zoning laws to develop more affordable housing and creating opportunities for young people to enter the construction industry as ways to increase Atlanta’s housing supply, soothing the housing crunch.
“We are seeing some people who are holding on to their homes who would ordinarily put them into the market,” said Tom Smith, the academic director of the Master’s of Finance Program at Emory University’s Goizueta Business School.
Smith added that there could be more interest rate cuts ahead as the Fed is near its 2% target.
“We hope that this will have downward pressure on mortgage rates. I suspect that it will over the next couple of weeks. But, we did actually see mortgage rates tick up a little bit,” Smith said. “It’s generally good news, but don’t hold your breath and think mortgage rates are automatically gonna fall by a quarter of a point tomorrow.”
